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Reduction in Uniformed Overtime Is Still Needed

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July 12, 2018

CBC’s August 2017 blogpost Overboard on OT cautioned the City’s uniformed overtime caps would likely be unsuccessful unless coupled with workforce and work rule changes that would need to be negotiated with the municipal unions.1 Since then the Fire Department (FDNY) and Department of Correction (DOC) have both exceeded their fiscal year 2018 caps. It is now even clearer that substantive changes are needed to get uniformed overtime under control.

Background

Uniformed overtime is more than two-thirds of all City overtime spending, as shown in Figure 1, while uniformed employees are less than one-quarter of the workforce. In fiscal year 2016 uniformed employees earned $1.2 billion in overtime, an average of $19,400 each, with 53 percent of the uniformed workforce earning overtime pay in excess of 20 percent of base salary.2

Uniformed Overtime Caps

In order to control this spending a cap on City-funded uniformed overtime was imposed at the Police Department (NYPD) in fiscal year 2016.3 Caps were later imposed at the FDNY and DOC beginning in fiscal year 2018. The Department of Sanitation (DSNY) does not have a cap because fluctuations in its overtime spending are largely a function of the number of storms and inches of snowfall.

After the cap was increased to account for raises for police officers, NYPD stayed below its cap in fiscal years 2016 and 2017 and the Mayor’s Office of Management and Budget (OMB) projects uniform overtime will be below the 2018 cap of $506 million.4 However, while the FDNY and DOC are spending less on uniformed overtime in fiscal year 2018 than in 2017, both departments are expected to exceed their caps. Accordingly, the City increased the FDNY and DOC uniformed overtime budgets by $59 million for fiscal year 2018 in the Fiscal Year 2019 Executive Budget. (See Table 1.)

Fire Department

Uniformed overtime at the FDNY in fiscal year 2017 was $272 million. The FDNY has been unsuccessful in staying under its fiscal year 2018 uniformed overtime cap of $228 million, and the budget was increased by 10 percent ($22 million) to $250 million as part of the Fiscal Year 2019 Executive Budget.5 New hiring has gradually reduced the need for overtime to cover fixed posts, and the 2018 estimates are 8 percent lower than fiscal year 2017. (See Figure 2.) The fiscal year 2019 cap for the FDNY assumes overtime spending of $206 million, an 18 percent reduction from the $250 million expected to be spent this year.6

Department of Correction

DOC uniformed overtime was $240 million in fiscal year 2017. Headcount increases have not led to substantial reductions in overtime, even as the average daily population in jails has steadily declined. (See Figure 3.) DOC has been unsuccessful in staying under its fiscal year 2018 uniformed overtime cap of $165 million, and like the FDNY, the budget was increased in the Fiscal Year 2019 Executive Budget, in this case by 22 percent ($37 million) to $202 million. If DOC meets this level, it would represent a 16 percent decrease from fiscal year 2017, but still exceed uniformed overtime spending in fiscal years 2010 through 2015. OMB expects DOC to reduce overtime by 26 percent next year, to $150 million, on par or slightly above fiscal years 2010 to 2015 levels.

Vacancies and Absenteeism

Vacancies are no longer a systemic cause of overtime at the FDNY or DOC. Headcount has increased at both agencies and exceeds budgeted levels at the end of fiscal year 2017.7 Absenteeism, on the other hand, appears to have a significant impact on overtime. The absence rate for sick leave and line-of-duty injury leave increased for the FDNY and DOC from 2014 through 2017. (See Figure 4.) In the first four months of 2018 the FDNY rate has held steady at more than 7 percent while the DOC rate dipped. Nonetheless, both departments have absence rates far above the uniformed and citywide averages, which may partly explain why overtime controls fall short despite increased staffing levels.

The FDNY itself has linked staffing to the absence rate. Exceeding a monthly absence rate of 7.5 percent at the FDNY triggers a contractual reduction in staffing at 10 engine companies, from 5 firefighters to 4. Despite the absence rate the FDNY reinstated the fifth firefighter at these 10 companies on December 26, 2017 due to the extreme cold, but rolled it back again in March 2018. The FDNY also delayed a February 1, 2018 implementation of the expansion to 5 firefighters at an additional 5 engine companies. After reinstating the fifth firefighter at the 15 engine companies in April 2018, the FDNY once again reduced staffing to four firefighters in July 2018. 8

Conclusion

Uniformed overtime remains a substantial cost at the FDNY and DOC, and labor and management must come to the table to develop better strategies to control these costs. The answer is not simply hiring more uniformed employees. Currently both agencies are staffed at budgeted levels, but overtime levels have exceeded budget projections. The high rate of absenteeism is a contributing factor that should be tackled with a comprehensive strategy and changes to the sick leave policy, which currently grants unlimited sick time to uniformed employees. Most importantly, as described in Overboard on OT, work rule changes will need to be negotiated in the next round of labor contracts to address the root causes of excessive overtime.

City of New York, Mayor’s Office of Management and Budget, conference call with Citizens Budget Commission staff (May 14, 2018).

A new effort expected to contribute to reductions in overtime is a civilization program affecting 69 positions next fiscal year and 94 positions in fiscal year 2020 and beyond. These yet-to-be-identified positions are currently filled by uniformed firefighters, but could be staffed with civilian employees, which would allow the FDNY to redeploy the firefighters to engines and companies. However, as the specific positions have not been identified, it is not clear the extent to which this will result in uniformed overtime reductions. City of New York, Mayor’s Office of Management and Budget, Executive Budget: Fiscal Year 2019, Financial Plan Reconciliation (April 26, 2018), p. 21, http://www1.nyc.gov/assets/omb/downloads/pdf/exec18-fprecon.pdf, and conference call with Citizens Budget Commission staff (May 14, 2018).

At the end of March 2018, the FDNY had 11,067 uniformed employees, compared with a forecast of 10,914 for fiscal year 2018. For DOC there were 10,873 uniformed employees on the payroll at the end of March 2018, compared with a budget of 10,427. Some of the excess is due to new hires on payroll who are undergoing training and may not be working in the field yet. City of New York, Office of Management and Budget, Adopted Budget: Fiscal Year 2019, Full-Time and Full-Time Equivalent Staffing Levels (June 14, 2018), https://www1.nyc.gov/assets/omb/downloads/pdf/adopt18-stafflevels.pdf; FY 18 March Headcount (via email on May 29, 2018); and conference call with Citizens Budget Commission staff (May 14, 2018).